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The Securities and Futures Commission (SFC) today published the latest issue of its Enforcement Reporter in which it reminded the senior management of listed companies about the high standards expected of them. Directors and senior executives are urged to honestly and diligently discharge their duties to prevent fraud, manage conflicts of interests, promptly disclose inside information and always put the company’s interests before their own in order to protect the interests of all shareholders as well as to protect themselves from investigation and enforcement action.
The newsletter also outlines some of the SFC’s enforcement powers under the Securities and Futures Ordinance relating to senior management accountability and summarises some of its recent cases relating to directors and senior executives.
“Our financial markets are recognised internationally as fair, open and transparent, but recurring incidents of fraud and misconduct involving listed companies threaten to blemish this reputation,” said Mr Thomas Atkinson, the SFC’s Executive Director of Enforcement.
“Corporate fraud and misfeasance remain our top enforcement priorities and we are investigating a large number of cases which involve serious allegations and dereliction of duty on the part of listed companies’ senior management,” Mr Atkinson added. “Directors and senior officers play an important role in protecting shareholders’ interests and those who fail to perform these critical duties will be held accountable.”
In addition, the newsletter reminds directors and senior executives of the SFC’s recent guidance on valuations in corporate transactions, which warns against relying on a valuation to justify the amount of consideration in a corporate transaction when it is clearly imprudent or unreasonable to do so.
The newsletter, available on the SFC website, is part of the SFC’s initiatives to enhance the transparency of its work and provide the market with regular updates on enforcement trends and priorities. The public may subscribe to the Enforcement Reporter by filling out the form available under the “Subscribe” link on the website.
